Reducing Health Care Premiums! How?

Every year small businesses grapple with health premiums continuing to go up. The renewal paperwork comes from their health insurance agent [whom they have seen since this same time last year] and it has a 20%, 30% or even 40% increase in premium for the same policy. So the business owner is left with some hard decisions that have to be made. Most employers are extremely reluctant to reduce benefits. So, what left to do? Well, they can pass along the entire increase to the employees which never goes over well. They can absorb the entire increase themselves but that will erode an already fragile profit margin. The typical employer tends to opt for some happy medium option whereby the employer is absorbing some of the shock and the employee picks up the rest. One of the ways to have the employee pick up a portion is by increasing the co-pay amount that's built into the plan design. The problem with that approach is you're never going to make up the gap in the premium increase by adjusting the co-pay for office visits from $25.00 to $40.00. The only thing that left is increasing the deductible that the employee has to meet before benefits kick in. Employers typically go kicking and screaming to implement this but it's the only way to make a real impact.

There is hope though! By increasing the deductible you may be able to qualify for a Health Saving Account where the employee is paying for out-of-pocket expenses out of a tax-deferred medical savings account that bears interest. In addition, now that the employee has to pay more out-of-pocket expenses then before, the employer can offer a myriad of supplemental coverages that help fill in the gaps. For example, a hospital confinement policy is very inexpensive and pays the employee directly a lump-sum benefit daily for a hospital stay. There are also Limited-Medical Benefit plans that cover such things as doctors visits and preventative care. Again, typically the covered amount is paid directly to the employee. These are actually individual plans that the employer can help fund or the employee pays the full amount of the monthly premium. The advantage to the employee of an individual policy is that it's portable - they can take it anywhere they go. In either case, the monthly premiums are very affordable and will help cover some of the new expenses employees have to pay as a result of an increase in deductibles.

For more information on this and other ways to reduce health premiums such as wellness programs and lessen the impact on your employees email me at bknauss@employeemployersolutions.com.

Too Small for a Group Plan?

Many small businesses struggle with wanting to provide benefits to their few faithful employees but just can't seem to make it happen. They have 2 or 5 employees and can just never get to the 75% percent participation requirements set by most insurance carriers for group plans. Maybe it's just that the business owner can't afford to cover the single rate on each eligible employee required by most carriers as well. So, what's left for the business owner to do? Sit back and watch good employees leave and go to a company that does provide some sort of benefits plan. Fortunately, if you find yourself in this position, you do have options. One option is actually very attractive and makes a lot of sense.

The answer is - individual health insurance policies for your small group of employees. Why not? Before you discount this idea out-of-hand - hear me out. We already know you can't qualify for a group plan. You either don't have the minimum participation needed or you can't afford your employer portion of the cost. Having each of your employees set-up their own individual plan solves many of those problems. No, it can't be an "employer sponsored" plan, which means the employer can't have it set-up in the company name and pay the monthly premium. They can, however, encourage their employees to get their own plan and contribute to their monthly or weekly pay in the form of additional income to help cover some of the expenses. Check with your accountant about the tax ability of such additional income. The employer can pick what that amount would be, so there's flexibility. I would caution against varying amounts by employees. Establish one flat amount for all those participating and incorporate into your company handbook. You could also set a flat amount for single coverage, family coverage, etc. You get the idea. There are many advantages of this strategy for both the employer and the employee:

Employer Advantages:

1. Being able to have employees covered for health benefits.
2. Increased retention.
3. Individually underwritten so no adverse risk associated with a group.
4. Flat amount for reimbursements enable employers to control costs.
5. Able to attract quality employees.

Employee Advantages:

1. The plan is portable. It goes with the employee where ever they go.
2. Premium isn't adversely affected by group plan members.
3. You control what insurance carrier and plan you go with. You're not locked into one single option. Plus, if you and your family are in relatively good health, you can shop it every year if you wish.

For more information about how I might be able to assist you on establishing an employee benefits program email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com.

Thanks

Out of Work and Out of Insurance??

Unfortunately, one of the many casualties of this new economy are lots people out of work and struggling to figure out how to keep their health insurance - even with the recently changes to COBRA. In fact, many workers being left go work for employers that don't even have to comply with COBRA (having less than 20 employees). Well, there are some very practical ways to cover your families most basic needs at an affordable monthly premium.


Short-term or Limited Medical Benefit plans, as they're called, are just a few practical solutions for someone who finds themselves out of work for the foreseeable future. As the names imply, they're designed to provide coverage for a short range of time such as 6 or 12 months,as well as, benefits for hospital confinement or some routine procedures. Typically they come with a choice of deductibles and lifetime maximums. They're not designed to cover catastrophic claims or be in place for the long-term. They cover such things as doctors visits, hospital benefits, emergency room care, outpatient services and much more. The premium is very affordable and you can be approved in a day or so.

Here are some situations that Short-term or Limited Medical Benefits make sense:

1. Between jobs - For about half the cost of COBRA, Short-term Medical offers next day coverage.
2. Waiting for Employer Benefits - New employers often impose a waiting period before you're eligible for health benefits. With Short-term Medical, you stay insured and can choose the length of your plan.
3. Temporary or Seasonal Employees - When your employment schedule is unpredictable, it's hard to maintain health coverage, Short-term Medical provides flexibility.
4. Newly Independent - Young adults and recent graduates may no longer be eligible for health insurance through a student plan or their parents plan. Short-term Medical is an affordable way to fill the gap.

Highlights:

• Coverage as soon as the next day.
• You may keep your own doctors.
• Access doctors 24/7/365 - from your phone.
• Low monthly premium.